Managing debtors is often a cause of frustration for many small business owners.
Unpaid invoices can seriously disrupt cash flow. Between chasing late payments and keeping track of invoices, debt collection can be a headache.
Fortunately, there are ways to speed up your payments with a few simple adjustments to your invoicing system you can increase your chances of getting paid promptly. Here are five ways to speed up your customer payments:
Check contact details
Ensure the location and contact details are accurate and up-to-date so your invoices reach the right person. Be sure to quote any relevant customer reference number they have provided to you, or you have provided to them. Asking your customers what they require on their invoice will save time and prevent you from re-invoicing due to amendments.
Set payment terms
Set standard payment terms for when you expect to be paid after the invoice is sent out, for example, payment within 30 days. When setting your payment terms consider types of payments, credit limits and early payment incentives to encourage customers to pay early or on time.
Respond to invoice queries immediately
Great communication with your customers can make all the difference when it comes to getting paid on time. Address invoice queries immediately and keep your customers informed of any changes in billing or status on their work etc.
Provide multiple payment options
Providing customers with a range of payment options, such as online and phone payments, will increase your chances of getting paid quickly. Be sure to include step-by-step instructions on the invoice to make it simple for your customers to pay you.
Charge late fees
Late payments should be discouraged by charging a late fee to increase your customer’s urgency to pay on time. The invoice should clearly state your right to set a late fee for overdue invoices and state exactly what the fee percentage is and when it applies.